The Span of Central Direction
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This essay may be labouring the obvious. But obvious though my result may seem, I can find it stated nowhere, while a great deal has been written which contradicts it by implication.
I affirm that the central planning of production-in the rigorous and historically not unwarranted sense of the termis strictly impossible; the reason being that the number of relations requiring adjustment per unit of time for the functioning of an economic system of n productive units is n-times greater than can be adjusted by subordinating the units to a central authority. Thus, if we insisted in placing the 100,000 business units of a major industrial country under a single technocratic control, replacing all market operations by central allocations of materials to each plant, the rate of economic adjustments would be reduced to about I : 100,000 of its usual value and the rate of production would be reduced to the same extent.